In Outbox: Your outgoing mail ernst said: On Mon, 31 Jul 1995 [EMAIL PROTECTED] said: >Ajit, > >Ok. You are asking how various prices are determined in Marx's CAPITAL. What I >have attempted to say is that the prices are determined by abstract labor time >ex post and not ex ante. We can tell the abstract labor content of a commodity >only after that commodity is "priced" -- not before. _________________________ >John, > >It seems you are taking prices, which cannot be but market prices, as *given*. >Now market prices are the most evanescent variable among all the variables in >economics. To build Marx's theory of value and accumulation on the *given* >market prices would be, in my opinion, akin to commiting a theoretical suicide. >I hope I have misunderstood you--but my sense is that I have not. In that case, >I will urge you most sincerely to rethink this whole issue one more time. Now >you say that your central problem is Marx's theory of accumulation. But then >how can you talk about accumulation without even having a unit to measure the >accumulation. Are you talking about accumulation in physical terms? If not, >then what is being accumulated? Moreover, a theory of accumulation necessarily >deals with long periods of time, whereas "market prices" can fluctuate from >hour to hour. Is it possible to build a theory of accumulation on a *given* >variable that changes from hour to hour? > >Cheers, ajit sinha >ps. some more minor comments below: >_____________________ >John goes on: > >Thus, Marxian economics has no theory of price determination that would satisfy >someone steeped in modern economics. The price paid for such theories in >modern economics is the failure to develop a theory of growth that adeqately >explains the dynamics of the economy. Marx pays no such price is my hypothesis. > The main task for those, like myself, who seek to defend Marx is to cleary >develop and explain Marx's "law of motion." To claim, using Marx's concept of >abstract labor, one can derive prices even equilibrium prices would be to go >down a path I see no point in pursuing. >It has gotten standard economists and would-be Marxists no where. >___________________ >I don't know who you are refering to as "some one steeped in modern economics". >I completely reject neo-classical theory of prices. Don't accept the concepts >of demand and supply *schedules*. And don't think that Marx's labor-values are >dependent on any kind of prices--let alone "market prices". ajit >________________ >John again: > >Let me be a bit more specific. To detemine market values in a dynamic economy >one needs to know something about the levels of demand for the various >products. Those levels are affected and effected primarily by the rate of >accumulation. Have we an adequate understanding of what determines that rate? > I think both of us would agree -- we do not. How do we begin to understand >it? It seems to me that we have to see how Marx would have incorporated into >his notion of accumulation the turnover of fixed capital. ___________________ >What is "market values" by the way? I think we are getting more and more deep >in trouble with the whole concept of value. Now, as far as your question of >what determines the rate of accumulation? I think we have a fairly good idea >that it is the *rate of profit* for classical economists as well as Marx. > >Cheers again, ajit sinha Ajit, Some comments. 1. No, I do not think you are "steeped" in modern economics in the neoclassical sense. I infer, however, that price theory is of concern to you. 2. I don't think the rate of profit is THE determinant of the rate of accumulation. It seems to me that we ought to be concerned as Marx was with the accumulation funds that build as fixed capital depreciates. We should also be concerned with technical change as well as the aged nature of the technologies used in production. Not all of these would immediately affect the rate of profit but could and do impact the rate of accumulation. 3. To say that to build a theory on market prices is suicidal seems to indicate that we are not communicating. Market prices are the concrete starting point for any theory that attempts to grasp reality. We know them -- they are given. To travel from the cncrete to the abstract we next encounter market values, prices of production, and ultimately values and abstract labor. Thus to travel from abstract labor to prices is not a process of a matter of deriving anything, but should be a matter of retracing the steps already familiar to the one presenting the argument and ultimately those presented with it. The difficulty in this matter is that the reality of market prices is more than simply a set of prices encountered in day to day affairs. Best to you, John -- John R. Ernst
